Draft – Strictly Not for Quotation th 18 ANNUAL RESEARCH WORKSHOP Socio-economic Effects of Large-scale Gold Mining on Artisanal Miners in Tanzania: Experiences from Bulyanhulu Gold Fields by Samwel J. Kabote and Elliott P. Niboye Draft Report GD10 th Presented at REPOA’s 18 Annual Research Workshop held at the Kunduchi Beach Hotel, Dar es Salaam, Tanzania; April 3-4, 2013 REPOA funded this research project as a part of our capacity building programme for researchers. This preliminary material / interim, or draft research report is being disseminated to encourage discussion and critical comment amongst the participants of REPOA’s Annual Research Workshop. It is not for general distribution. This paper has not undergone REPOA’s formal review and editing process. Any views expressed are of the author(s) and do not necessarily represent the views of REPOA or any other organisation. 1 Socio-economic Effects of Large-scale Gold Mining on Artisanal Miners in Tanzania: Experiences from Bulyanhulu Gold Fields by Samwel J. Kabote and Elliott P. Niboye ACKNOWLEDGEMENTS This study was conducted under the auspices of the Research on Poverty Alleviation (REPOA). The authors therefore are highly indebted to REPOA for financial support; without which this study could have not been possible. The research team is also grateful to Mr. Khamis Hassan for his assistance during data collection in the villages and to Mr. Mumina Mussa who used most of his time for coding and entering the data of this study into the Statistical Package for Social Sciences computer software for analysis. Special thanks are also extended to REPOA reviewers and participants of the REPOA’s internal seminar presentation for the comments in the earlier draft of the report, and also to Prof. Adolfo Mascarenhas for reading the entire manuscript and providing useful comments. It is not easy to thank every individual, who, in one way or another provided support for this study. However, many thanks are extended to all individuals who tirelessly dedicated their time to provide useful information for the study: they include artisanal miners, smallholder farmers, village leaders, Resident Mines Officials in Kahama District, District Land Officer, District Planning Officer and officials at the Ministry of Energy and Minerals. i ABSTRACT While large-scale foreign-based gold mining continues to dominate the mineral sector since 1990s, poverty in artisanal mining communities surrounding large-scale gold mining remains an issue of public outcry in Tanzania. This study involved 121 artisanal and 45 non-artisanal miners in examining socio-economic effects of large- scale gold mining on artisanal miners in the Bulyanhulu gold fields in Kahama District. Its three specific objectives were: to assess policy issues in mining and its implication on artisanal miners’ social well-being; to assess socio-economic activities among artisanal miners before and after domination of large-scale gold mining in order to ascertain the dynamics; and to analyze contribution of large-scale gold mining to social service development. The study adopted cross-sectional research design in analyzing the current situation. While respondents for household survey were chosen through systematic simple random sampling, key informants were selected through purposive sampling technique. Both qualitative and quantitative data collection and analysis were involved in order to increase understanding of socio-economic effects. Quantitative data were summarized using Statistical Package for Social Sciences (SPSS) computer soft ware, whereas, qualitative data were analyzed using content analysis techniques. Dynamics of socio-economic activities were assessed using before and after domination of large-scale gold mining technique. In order to analyze contribution of large-scale gold mining to social service development, the contribution of large-scale gold mining was assessed in relation to other stakeholders’ contribution. Findings revealed the following: first there was a mismatch of national policy and mining laws regarding displacement and compensation of artisanal miners and the practice on the ground. This resulted into creating good environment for large-scale gold mining compared to artisanal mining. Second, although artisanal mining remained the mainstay of artisanal miners’ livelihoods its contribution to the household income decreased after domination of large-scale gold mining. Diversification to other livelihood options was also limited. Third, unlike neo-liberal thinking, large-scale gold mining did not substantially contribute to social service development regarding contribution to the district budget, job creation and employment, water sources development, health care facilities and primary education development. Specifically, large-scale gold mining caused negative effects including decrease in household income accruing from artisanal mining, unsustainable employment opportunities, increased HIV and AIDS and Air Respiratory infections. These effects have exacerbated poor living standards in the study area. Therefore, concerted efforts are needed to switch the negative effects of large-scale gold mining into opportunities for improving living standards of the artisanal miners and the local people at large. The district and central government ii level policy makers should also turn the mere policy statements to improve domestic- based small-scale gold mining by putting policy and laws into action. Small-scale gold mining dominated by domestic investors is sustainable compared to large-scale gold mining, which is largely dominated by foreign investors because most of the profit accruing from small-scale gold mining can be invested into local communities compared to large-scale gold mining, which can repatriate most of the profits. Finally, the study recommends further study to address the question ‘how can large-scale gold mining become an instrument for poverty reduction?’ Specifically, further study should focus on how to reverse the trend from negative to positive and sustainable socio-economic effects. iii TABLE OF CONTENTS ACKNOWLEDGEMENTS ........................................................................................... I ABSTRACT ............................................................................................................... II TABLE OF CONTENTS ............................................................................................ IV LIST OF TABLES ..................................................................................................... VI LIST OF FIGURES................................................................................................... VII LIST OF PHOTOS ................................................................................................... VII LIST OF MAPS ........................................................................................................ VII LIST OF ACRONYMS ............................................................................................. VIII 1.0 INTRODUCTION ............................................................................................. 1 1.1 LARGE-SCALE AND ARTISANAL MINING IN TANZANIA .......................................... 1 1.2 STATEMENT OF THE PROBLEM ........................................................................ 3 1.3 SIGNIFICANCE OF THE STUDY .......................................................................... 4 1.4 OBJECTIVES OF THE STUDY ............................................................................ 4 1.5 RESEARCH QUESTIONS .................................................................................. 5 2.0 LITERATURE REVIEW ................................................................................... 6 2.1 EFFECTS OF LARGE-SCALE MINING: THEORETICAL ARGUMENTS ......................... 6 2.2 HISTORY, POLICY AND LEGAL ISSUES IN GOLD MINING OF TANZANIA .................. 6 3.0 JUSTIFICATION FOR THE STUDY DISTRICT .............................................. 9 4.0 METHODOLOGY .......................................................................................... 11 4.1 CONCEPTUAL FRAMEWORK ........................................................................... 11 4.2 RESEARCH DESIGN AND METHODOLOGICAL APPROACHES ............................... 12 4.3 PROBLEMS ENCOUNTERED IN CONDUCTING THE STUDY .................................. 15 4.4 GENERAL CHARACTERISTICS OF THE SELECTED SAMPLE ................................ 15 5.0 FINDINGS ..................................................................................................... 19 5.1 POLICY AND LEGAL ISSUES IN ARTISANAL MINING ........................................... 19 5.2 EFFECTS OF LARGE-SCALE MINING ON ECONOMIC ACTIVITIES .......................... 22 5.3 EFFECTS OF LARGE-SCALE GOLD MINING ON SOCIAL SERVICE DEVELOPMENT . 28 6.0 DISCUSSION ................................................................................................ 38 6.1 POLICY, LEGAL CONTEXT AND ARTISANAL MINERS’ SOCIAL WELLBEING ........... 38 6.2 LARGE-SCALE GOLD MINING AND DYNAMICS IN LIVELIHOOD OPTIONS .............. 39 6.3 CONTRIBUTION OF LARGE-SCALE GOLD MINING TO SOCIAL SERVICE DEVELOPMENT ............................................................................................ 42 iv 7.0 CONCLUSIONS AND EMERGING POLICY IMPLICATIONS ...................... 44 8.0 DISSEMINATION OF RESEARCH RESULTS ............................................. 47 9.0 SUGGESTED FURTHER RESEARCH ......................................................... 48 REFERENCES ......................................................................................................... 49 APPENDICES .......................................................................................................... 52 APPENDIX 1: BGM CONTRIBUTION TO THE DISTRICT BUDGET (IN TAS): 2001-2010 ..... 52 v LIST OF TABLES Table 1: Population Trends in Kahama District ................................................. 10 Table 2: Number and Type of Key Informants Involved .................................... 14 Table 3: Number of Selected Respondents per Village .................................... 14 Table 4: Household Size of the Selected Sample (% in brackets) .................... 17 Table 5: General Characteristics of the Selected Sample (N=166) .................. 17 Table 6: Immigration in the Study Area ............................................................. 18 Table 7: Descriptive Statistics Showing Some Respondents’ Characteristics .. 18 Table 8: Policy Issues on Displacement and Compensation of Artisanal Miners ................................................................................................. 20 Table 9: Displacement of Artisanal Miners (% in brackets) ............................... 21 Table 10: Respondents’ Responses on Number of Acres Owned in the Year 2010 (% in brackets) ........................................................................... 21 Table 11: Respondents’ Responses on Land Acquisition Methods (% in brackets) ............................................................................................. 22 Table 12: Important Economic Activity before and after Domination of Large- scale Mining ........................................................................................ 23 Table 13: Respondents’ Responses on Economic Activities before Domination of Large-scale Mining (% in brackets) ..................................................... 25 Table 14: Respondents’ Responses on Economic Activities after Domination of Large-scale Mining (% in brackets) ..................................................... 26 Table 15: Percentage Contribution of Household Income Sources before and after Domination of Large-scale Mining (N=166) ................................ 27 Table 16: Casual Labour Employment in the Study Area ................................... 27 Table 17: Percentage Contribution of the Bulyanhulu Gold Mine to the District Budget ................................................................................................ 28 Table 18: Sources of Drinking Water in the Study Villages ................................. 30 Table 19: Households accessing Water from WEDECO .................................... 30 Table 20: Respondents Responses on Type of Housing .................................... 32 Table 21: Pair-wise Ranking of Common Diseases in the Study Area ............... 34 Table 22: Trends of Common Diseases at Bugarama Dispensary: 2005-2009 .. 34 Table 23: Textbooks Received at Kakola ‘B’ and Kakola ‘C’: 2004-2010 ........... 35 Table 24: Books Received at Busulwangili and Kakola ‘C’: 2004-2010 .............. 35 Table 25: Classroom Construction Material Received at Busulwangili and Kakola ‘A’ ........................................................................................................ 36 Table 26: Classroom Construction Material Received at Kakola ‘C’ and Kakola ‘B’ ........................................................................................................ 37 Table 27: Education Quantity and Quality Indicators in the Study Area .............. 37 vi LIST OF FIGURES Figure 1: Socio-economic Effects of Large-scale Gold Mining in Tanzania ....... 12 LIST OF PHOTOS Photo 1: Young Artisanal Miners at Work ........................................................ 15 Photo 2: An Old Man Crushing the Rock ......................................................... 16 Photo 3: Bore hole well in Kakola .................................................................... 29 Photo 4: Unprotected Water Source in Bugarama ........................................... 29 Photo 5: Water kiosk in Ilogi ............................................................................ 31 Photo 6: Bore hole well in Bugarama ............................................................... 31 Photo 7: Bugarama Dispensary in Bugarama Village ...................................... 33 LIST OF MAPS Map 1: Map of Tanzania Showing Location of Kahama District ........................ 9 vii LIST OF ACRONYMS AFRODAD African Forum and Network on Debt and Development AIDS Acquired Immunodeficiency Syndrome ARI Air Respiratory Infection BGM Bulyanhulu Gold Mine CSRP Corporate Social Responsibility Plan FDI Foreign Direct Investment FGD Focus Group Discussion GDP Gross Domestic Product HIPC Highly Indebted Poor Countries HIV Human Immunodeficiency Virus IMF International Monetary Fund KDC Kahama District Council KEEP Kahama Education Enhancement Project KMCL Kahama Mining Corporation Limited LEAT Lawyers Environmental Action Team of Tanzania PEDP Primary Education Development Plan PML Primary Mining Licence REPOA Research on Poverty Alleviation RMO Resident Mines Office SPSS Statistical Package for Social Sciences STAMICO State Mining Corporation STI Sexually Transmitted Infection TB Tuberculosis TIC Tanzania Investment Centre URT United Republic of Tanzania VEO Village Executive Officer WB World Bank WEDECO Water and Development Company Limited viii 1.0 INTRODUCTION Since inception of the neo-liberal development thinking, the global development thinking has shifted from the public sector being sole controller of the mineral sector to viewing large-scale gold mining as an engine for private sector-led economic growth. This was a response to conditions of the World Bank (WB) and International Monetary Fund (IMF) for debt relief for Highly Indebted Poor Countries (HIPCs), which took place in the 1980s. Among concerns of large-scale gold mining are socio- economic effects on artisanal and small-scale miners in developing countries including Tanzania. For instance, displacement of artisanal miners from gold mining areas to pave way for large-scale mining is the most cited concern in literature. Yet, artisanal miners’ social well-being depends on artisanal mining operations taking place in gold rich areas where artisanal miners are being displaced to pave way for large-scale mining. Following domination of large-scale gold mining in Tanzania and dependence of artisanal miners’ livelihoods in artisanal mining, a pertinent question is then invoked; ‘large-scale gold mining for whose benefit?’ The concept of artisanal mining differs slightly from the concept of small-scale mining though some scholars perceive them to be synonymous. For instance, Nyankweli (2012) defines artisanal and small-scale mining as mining operations for subsistence. This definition does not explicitly distinguish artisanal mining from small-scale mining. Nevertheless, Mwaipopo et al. (2004) and Fisher (2007) differentiate the two concepts by arguing that artisanal mining is poverty driven; often employ traditional, manual tools and low technologies. It is often considered illegal and can operate with or without licence. Small-scale mining on the other hand, employ some degree of mechanisation, licensed and organised in some form of mining associations. Furthermore, small scale mining can have legal claimed holdings. In addition, small-scale mining can use improved technologies including drilling machines, compressors, water pumps and most grind the gold ore by using ball-mills. Artisanal and small-scale mining are similar in that both are based on labour intensive mining and processing techniques with low per capita productivity; they both employ simple tools and require low capital investment (Mwaipopo et al., 2004: Fisher, 2007). 1.1 Large-scale and Artisanal Mining in Tanzania In the past three decades, large-scale operations in the mineral sector in Africa have become a widespread phenomenon. Following economic reforms of the 1980s and 1990s, Tanzania like other countries in the global south and Africa in particular opened up her mineral sector to large-scale foreign investment. This has resulted into increasing inflows of Foreign Direct Investments (FDI) in the country (URT, 2009a). Bulyanhulu gold fields have therefore become dominated by large-scale gold mining 1